UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 38903 / August 5, 1997
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 944 / August 5, 1997
ADMINISTRATIVE PROCEEDING
File No. 3-9354
___________________________________
: ORDER INSTITUTING PUBLIC
In the Matter of : PROCEEDINGS PURSUANT TO
: RULE 102(e) OF THE
JAMES P. BROWN, : COMMISSION'S RULES OF
: PRACTICE, MAKING FINDINGS
Respondent. : AND IMPOSING REMEDIAL
: SANCTIONS
___________________________________:
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest that public administrative
proceedings pursuant to Rule 102(e) of the Commission's Rules of
Paragraph (3) of Rule 102(e) provides, in relevant
part, that:
. . . (i) The Commission, with due regard to the public
interest . . . may . . . suspend from appearing or
practicing before it any . . . attorney . . . who has
been by name . . . permanently enjoined by any court of
competent jurisdiction, by reason of his or her
misconduct in an action brought by the Commission, from
violating or aiding and abetting the violation of any
provision of the Federal securities laws or of the
rules and regulations thereunder.
Paragraph (3)(ii) of Rule 102(e) provides, in relevant
part, that:
Any person temporarily suspended from appearing or
practicing before the Commission in accordance with
this . . . section, may within 30 days after service
upon him . . . of the order of temporary suspension,
petition to lift the temporary suspension. If no
petition has been received by the Commission within 30
days after service of the order, the suspension shall
become permanent.
Practice be, and they hereby are, instituted against James P. Brown
("Brown").
II.
In anticipation of the institution of these administrative
proceedings, Brown has submitted an Offer of Settlement ("Offer"), which
the Commission has determined to accept. Solely for the purpose of these
proceedings, and any other proceedings brought by or on behalf of the
Commission or to which the Commission is a party, Brown, without admitting
or denying the findings set forth herein, except as to the entry of the
injunction set forth in paragraph III.D. and the Commission's jurisdiction
over him, both of which are admitted, consents to the entry of this Order
Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of
the Commission's Rules of Practice, Making Findings and Imposing Remedial
Sanctions.
III.
Based on this Order and Brown's Offer, the Commission
finds the following:
A. Brown, an attorney licensed by the State of Florida, served as
general counsel of Policy Management Systems Corporation ("PMSC")
from 1986 through 1993 and was promoted to senior vice president
in 1992. The common stock of PMSC is registered pursuant to
Section 12(b) of the Securities Exchange Act of 1934 ("Exchange
Act"). During 1991, 1992 and the first quarter of 1993, Brown
practiced before the Commission within the meaning of Rule 102(e)
of the Commission's Rules of Practice in connection with the
preparation of PMSC's financial statements and other documents.
B. On July 22, 1997, the Commission filed a civil injunctive action
against Brown and others [Securities and Exchange Commission v.
Policy Management Systems Corporation, et al., Civil Action No.
96-CV-2193-0, (D. S.C.)] alleging, among other things, that Brown
violated Section 13(b)(5) of the Exchange Act and Rules 13b2-1
and 13b2-2 thereunder, and charging him with liability, as a
control person, for violations by PMSC of Sections 13(a),
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20,
13a-1 and 13a-13 thereunder.
C. The Commission's complaint alleged that from 1991 through the
first quarter of 1993, Brown reviewed financial statements
contained in certain periodic reports filed on behalf of PMSC
The findings herein are made pursuant to Brown's Offer
and are not binding on any other person or entity named
as a respondent in this or any other proceeding.
======END OF PAGE 2======
with the Commission. Certain of these financial statements
materially misstated PMSC s results of operations in violation of
generally accepted accounting principles. The complaint further
alleged that, as a control person, Brown was liable for PMSC s
failure to make and keep accurate books and records and to
maintain adequate internal accounting controls, and that Brown
provided inaccurate information to PMSC s independent auditors.
D. On July 22, 1997, without admitting or denying any of the
allegations contained in the Commission's complaint, Brown
consented to the entry of an order of permanent injunction
enjoining him from violations of Sections 13(a), 13(b)(2)(A),
13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 12b-20,
13a-1, 13a-13, 13b2-1 and 13b2-2 thereunder.
IV.
Based on the foregoing, the Commission deems it appropriate and in the
public interest to accept the Offer submitted by Brown and accordingly,
IT IS HEREBY ORDERED, effective immediately, that:
James P. Brown be, and hereby is, denied the privilege of
appearing or practicing before the Commission pursuant to Rule
102(e) of the Commission's Rules of Practice, provided, however,
that Brown may, after a period of five (5) years, apply to resume
appearing or practicing before the Commission.
By the Commission
Jonathan G. Katz
Secretary